EURUSD rises above 1.1600 as EU readies retaliation against Trump’s tariffs

EURUSD is edging higher on Monday, rebounding off the 200‑day simple moving average near the seven‑week low of 1.1580 to reclaim the 1.1600 psychological level. The move followed reports that EU ambassadors are pushing back against US President Donald Trump’s latest tariff threats on Europe over Greenland, stating they would prepare retaliatory measures should the additional duties move forward. That said, the renewed tariff tensions pressured the dollar lower against the euro.

Despite the recovery, EURUSD is struggling to build further upside momentum, meeting strong resistance at the short‑term ascending trendline, which aligns with the 50% Fibonacci retracement of the November-December upleg near 1.1637. Stronger resistance is located in the 1.1637-1.1680 region, which also includes the 50‑day SMA as well as both the short‑term descending trendline and the long‑term ascending trendline. A sustained break above this area could open the way toward the 1.1700 handle, which coincides with the 20‑day SMA and was last tested last week, with the 23.6% Fibonacci at 1.1727 acting as the next barrier.

Meanwhile, the momentum indicators lack clear directional conviction. The stochastics are flatlining near the oversold territory, the MACD remains below zero, and the RSI is still hovering below the neutral 50 level.

Should the pair retreat again and fall below the 200‑day SMA, the outlook would shift back to a more neutral stance, turning attention to the 61.8% Fibonacci level at 1.1597. Below that, the 78.6% Fibonacci at 1.1540 and the November lows at 1.1490 and 1.1468 would come into focus as crucial support areas for preventing more sustained losses.

In summary, although EURUSD has staged a strong rebound, recovering from multi-week lows, it has yet to convincingly rise above both the short‑ and long‑term trendlines. Only a clear break above 1.1700 would significantly reduce near‑term downside risks for now.